₦airaland Forum

Chukzyfcb:
Can't you see the big picture bro? That lack of bulk forex in our account is why we are suffering this much? Manufacturers are pulling out because of lack of forex to purchase raw materials, same goes for the aviation sector & so on & so forth. Why do you think inflation is steady rising? If we can attract forex, enough forex to counter the demand. Naira will strengthen, inflation rate will fall & then we can then re-adjust the MPR rate overtime as inflation slows. That's the possibilty of the move.
You can criticise the move but I'll advice you be constructive about it. Devaluation is not a 1 year or a 4year thing, Okonjo iweala has pointed out how it took 30yrs for dubai to be fully diversified. We need the loans now both for capex & to satisfy our growing appetite for forex. If you can procure a better solution, pls I'm all ears

davide470:
MPR now 14% (+200bps)..

All these 419 analysts

Truth234:
You still don't understand, it is wrong and wrong in every sense. Foreign investors will still not come, I trade the financial markets, I live the markets. So I know what I am saying, global risks and uncertainty is what is holding investors back.

Even if you hike rates, you will only attract local investors with very low volume to prop naira value. Which means, giving money to few people at the expense of the masses. How is that right?

Now, lets assume FDI eventually surged. How will importers sell if consumer spending is low? How will manufacturing come alive if people don't earn enough to buy or when unemployment continue to rise?

So take it, there is no way this is right.

Chukzyfcb:
You are still viewing the subject matter from the negative side. Also saying foreign Investors will not come is largely a speculation. Like I said from the start, its a gamble! Unemployement rose because manufacturers are finding it hard to cope. The naira exchange rate is rising daily, just yesterday it was 370naira to $1 @ the parallel market despite the MPR @ 12% what then would you have the cbn do? Should they deplete the little in our reserves trying to defend the naira? You still haven't procurred a solution, you are harping on the negatives. The basis remains that we need FOREX & we need it Soon to counter our negative GDP growth. If you can't still suggest how we go about that , then you are doing nothing new than just criticising.

Truth234:
and you don't see several job creation? Lower interest rates to create jobs and attack unemployment in order to increase consumer spending and boost manufacturing sector.

Done exchange words with you, its obvious you have no understanding of the subject matter.

jpphilips:
Buhari insisted that devaluation will never solve the problem, CBN claimed that floating will attract investors back in the market, the result is a devalued currency, double digit inflation and no investor, the same fx we needed to peg the naira is what we need to intervene in the floating regimen, Buhari was right afterall.

KELVIN086:
At this rate omo na 400 e go soon enter.
Hw people wey wan go do masters abroad go take pay school fees ?

nextstep:
Actually, if you remember, he was the one who resisted changing the official peg of 199. It was "learned" economists, bankers, students, taxi drivers, parents of students abroad, importers, etc. who were crying that he should allow the peg to float so that the disparity of official to parallel rates won't be so high. They also insisted that it would encourage the naira to gain.

Now that the naira has lost value after removing the peg, those armchair economists are absolving themselves of any blame.

jpphilips:
Buhari insisted that devaluation will never solve the problem, CBN claimed that floating will attract investors back in the market, the result is a devalued currency, double digit inflation and no investor, the same fx we needed to peg the naira is what we need to intervene in the floating regimen, Buhari was right afterall.

Ugosample:
If the pegging has continued, the gap between official and black market would have been more than 300 naira
The problem with the president is that he does not know what he is doing

jpphilips:
The problem with you is that you have no clue how the economy of the country works, the disparity between the official rate and the BM is necessary because raw materials for production and equipments have access to cheaper forex, the only thing the CBN needed was purchasing directly than giving it to the companies to avoid round tripping. That policy would have spurred the manufacturing sector to growth over time.

Chukzyfcb:
We are not exchanging words per se, we are actually discussing if you'll agree. So its a healthy debate if you ask me. You want CBN to lower MPR to a single digit whereas inflation is in the double digit & rising? Okay agreed, how will FG source funds for budget?
Have you forgotten we'v been delisted from JPmorgans bond
Or you don't remember the budget deficit that require heavy borrowing. how do FG create jobs & stimulate the economy if we don't even have enough to pay salaries, let alone invest in capital projects. Where were you when CBN reduced the MPR rate ? Everytin you are suggesting has been tried out, aint nothing new. We hv lowered the rates yet inflation rose aggresively. This is the route we must take, its a gamble but we must take it.
Our banks are in a turbulent situation, if then you lower lending rates to say 8% & inflation is 16%, how do you want the banks to hedge against inflation. You need a holistic view on this topic bruh. Its okay if you don't agree, but what you suggest now has been tried before with no positive results. We have to try the bumpy route!

Ugosample:
So you are telling me, an economist, that I have no clue about how the economy works? Lol.
So tell me, are you an economist yourself? I bet not.
The KEY reason why this mess is happening is because the dullard in chief knows nothing about how the economy works, and the Finance minister is incompetent, and lastly, policy somersault.

Truth234:
and you don't see several job creation? Lower interest rates to create jobs and attack unemployment in order to increase consumer spending and boost manufacturing sector.

Done exchange words with you, its obvious you have no understanding of the subject matter.

jpphilips:
You shouldn't write him off completely, he has a point when he said you have no real working card on the table.

thespokenword:
Ifeanyi uba offered to help the country over this naira freefall citing that the problem is indeed 60% political and 40% economical . But what happened, they ignored his opinion and even threatened him with corruption charges.... In a salient society , ifeanyi would have been appointed by the presidency itself and so many big grammar speaking professor of economics would have been asked to serve under him. Baba, I hale your methods, for the result speaks for it.

Ugosample:
Even with the peg, wasmt the dollar already 350+?
The man is clueless, simple and short

jpphilips:
A successful brick layer has more economic relevance than you in the scheme of things even with your paper Economics certificate from an under funded charge and bail Nigeria university or polytechnic. You should be ashamed to tell me you are an economist while you wield the opinion of a tailor.

Buharinomics was tried and tested, fix the currency, give it cheap to manufacturers to spur growth then allow the toothpick importers to face the parallel market.
Emiefelenomics devalued and bridged the gap, raw materials and equipment manufacturing have no access to cheap forex anymore, cost of manufacturing soared which led to high cost of both Local and imported products, worsened inflation yet no foreign and local investor in sight.

In the scheme of things, Buhari (the illiterate) is winning the Phd wielding Emiefele, it is not by paperwork, it is by experience, Buhari has experienced economic downturn in 1985, that is the experience Emiefele doesn't have.

jpphilips:
A successful brick layer has more economic relevance than you in the scheme of things even with your paper Economics certificate from an under funded charge and bail Nigeria university or polytechnic. You should be ashamed to tell me you are an economist while you wield the opinion of a tailor.

Buharinomics was tried and tested, fix the currency, give it cheap to manufacturers to spur growth then allow the toothpick importers to face the parallel market.
Emiefelenomics devalued and bridged the gap, raw materials and equipment manufacturing have no access to cheap forex anymore, cost of manufacturing soared which led to high cost of both Local and imported products, worsened inflation yet no foreign and local investor in sight.

In the scheme of things, Buhari (the illiterate) is winning the Phd wielding Emiefele, it is not by paperwork, it is by experience, Buhari has experienced economic downturn in 1985, that is the experience Emiefele doesn't have.

Now listen, Ugosample is right. The CBN and FG were forced to introduced flexibility forex policy because of continuous depletion of our 'foreign reserves' used to offset deficit caused by fixed foreign exchange rate.

If the FG had agreed to flexibility forex policy before global risks increased to the level last seen in 1999 due to Brexit, it would have worked because as at then foreign and local investors were still very interested in Nigeria market, because one, our GDP growth rate was better than most emerging economies but now it has dropped consecutively. Hence, they refused because experts are forecasting 400 by December.

And to worsen the situation, global economics is nosedive amid huge uncertainties, so why chasing people that may never come when you can as well focus on the masses, lower rates to create jobs, reduce unemployment and encourage the diversification this administration emphasized when they first came in ?

mctowel01:
I tire o
As you see me now, i no fit think straight again. All my masters plan just dey crash.

Yes this was what I thought but the CBN is yet to admit that so let's stick to what we know, unless I am chatting with Emiefele, then i will agree with you, if the CBN has lost completely their ability to fix the naira, why adopt dirty float against free float?

It is mere speculation you can't be so sure, I heard from an investor who said he is more concerned about the unrest in the Niger delta than the Fx risk.

How can you create jobs when your policy is parking up your manufacturing sector? Didnt you notice that while everything increased in price in the market, Beer never did, did you bother to find out why? By next week NBL will be forced to adjust prices or lay off staff in the worse case scenario, Buhari knew what he was saying, devaluation was never the answer.

Oga you are talking story.
I don't have much time to explain in detail why Buhari's foolishness led to this mess, but I'll just summarise.
Now, the Nigerian economy has more potential outside the sphere of oil, and that is the advantage it has over countries like Saudi and Venezuela who, unfortunately, don't have too much to fall on apart from oil.

That said, even with the crisis at hand, a president and economic team who knows what he is doing would have navigated his way out of this with less casualty
But the president does not know what he is doing.

First, he took too long to build up his cabinet, leaving the economy in a state of policy flux. No foreign investor likes that. They need to know the policy direction you are taking, And your target variables too, but since you did not have that, the rating agencies downgrade you, and in addition to potential investors not coming, those who are already here looked for a way out, leading to the worst capital flight in 15 years...... The ASI over the last year would show you that (of you are a sincere economist) Not to forget the budget wahala and the impasse he has with the Legislature.

The foreign reserves we have to back up the naira was made up of more than 40% portfolio investments, but because of these cluelessness, they had to pull out.
(And by the way, many people we call foreign investors are actually Nigerians in the diaspora, and they play a key role in the forex inflows into the country, as they have a big stake in the market)

So when the government has already made this blunder, you expect a peg on the naira to just miraculously work at keeping inflation at bay? Even when there was a peg, the naira was doing 330-353 already, so what are you saying?
And the peg was discouraging investors and those who send remittances because why would the CBN buymy dollars by force at 199, only for me to get it back at 300 plus? That is madness.

As for you insulting my background, lol.....
I'll just let that slide.

This was actually from CBN directive bro. You have to google to get this detail, some of us are professionals in the industry.

http://www.thisdaylive.com/index.php/2016/04/12/how-we-all-depleted-the-foreign-reserves/

http://saharareporters.com/2016/01/11/foreign-exchange-crisis-cbn-lifts-ban-cash-deposit-dollars-others

Please lets be reasonable, Niger Delta unrest started when? When did oil glut started that this administration refused to devalue to accommodate the difference? Wasn't that what prompt JPmorgan to removed us from emerging markets bond index?

Again, you seems to be confused, ND militants impact mostly crude oil buyers. The investors federal government is seeking are bond and treasury investors. So they don't need ND.

Why is the manufacturing sector weak? Because CBN and FG failed to adjust their monetary policy to accommodate 70 percent fall in oil prices. Consumer prices surged because of the difference between bank and parallel market rate, and unreasonable restriction of importers (41 items).

Buhari is not an economist so is not in his place to make these decisions, David Cameron, Shinzo Abe, Barack Obama etc don't meddling in economic matters.

Beer issue is still the result of poor monetary policy, they should have adjusted forex policy awhile back.

straneur:
This was actually from CBN directive bro. You have to google to get this detail, some of us are professionals in the industry.

http://www.thisdaylive.com/index.php/2016/04/12/how-we-all-depleted-the-foreign-reserves/

http://saharareporters.com/2016/01/11/foreign-exchange-crisis-cbn-lifts-ban-cash-deposit-dollars-others



Please lets be reasonable, Niger Delta unrest started when? When did oil glut started that this administration refused to devalue to accommodate the difference? Wasn't that what prompt JPmorgan to removed us from emerging markets bond index?

Again, you seems to be confused, ND militants impact mostly crude oil buyers. The investors federal government is seeking are bond and treasury investors. So they don't need ND.



Why is the manufacturing sector weak? Because CBN and FG failed to adjust their monetary policy to accommodate 70 percent fall in oil prices. Consumer prices surged because of the difference between bank and parallel market rate, and unreasonable restriction of importers (41 items).

Buhari is not an economist so is not in his place to make these decisions, David Cameron, Shinzo Abe, Barack Obama etc don't meddling in economic matters.

Beer issue is still the result of poor monetary policy, they should have adjusted forex policy awhile back.

See, I am not saying this to be right or wrong but what I am telling people like you is that you don't have to politicize everything. I am a Buhari fan and APC supporter, but Nigeria is bigger than all of US.

jpphilips:
Buhari insisted that devaluation will never solve the problem, CBN claimed that floating will attract investors back in the market, the result is a devalued currency, double digit inflation and no investor, the same fx we needed to peg the naira is what we need to intervene in the floating regimen, Buhari was right afterall.

stevecantrell:
IMF is laughing at us like crazy now...